Pemex platform fire kills five, slashes output: Update

Updates fatalities, adds shut-in production amount.

A fire at a Pemex offshore platform in the southeast basin of Mexico's Gulf killed five and slashed crude output, Pemex director Octavio Romero said today.

"The fire has caused the suspension of 421,000 barrels of crude from 125 production wells," Pemex director Octavio Romero told reporters in Mexico City today.

The fire on the E-Ku A2 platform in the Campeche sound started at 4:10 ET yesterday and was brought under control at 5:10 ET the same day, Pemex said.

Pemex expects to resume the production "within days, once electricity generation, affected by the fire, is restored," Romero said.

Five people died in the fire, while six people were injured and two remain missing.

The fire broke out during scheduled maintenance at the platform carried out by oil services companies Cotemar and Bufete de Monitoreo de Condiciones e Integridad.

"We are carrying out an analysis to understand exactly what caused the fire," Romero said.

Pemex denied that it has reduced investment in maintenance during the current administration, pointing instead to its Ps12.8bn ($626.7mn) risk reduction program from 2019-2021. Pemex has claimed $293.6mn through insurers for accidents registered during that same period, lower than previous periods, Romero said.

The platform is part of Pemex's main shallow-water production complex Ku Maloob-Zaap that represented 40.9pc of the total 1.77mn b/d crude output in June.

The fire is the latest in an increasing rate of accidents across Pemex's operations this year.

The number of accidents was up by 88pc in the first half of this year, compared with 2020, while the severity of those accidents also increased, according to Pemex's second quarter results report.

The platform fire also comes just a month after a gas pipeline leak within the same complex caused a massive blaze on the ocean surface.

Pemex has spent Ps12.8bn ($626.7mn) on a risk reduction program since 2019 but it has claimed $293.6mn through insurers for accidents registered during that same period.

As environmental, social and governance criteria (ESG) become more important to investors, Pemex will have to address its accident record if it wants to maintain access to financing.

"This year, Pemex's ESG score has deteriorated to such an extent — due to different fires and accidents — that it has now fallen below the minimum threshold for ESG overlays," Emso Asset Management senior portfolio manager Jens Nystedt told Argus recently.

By Rebecca Conan